Obama: The True Disciple of Saul Alinsky

Warning

Treasury Secretary Tim Geithner`s opening bid to Speaker John Boehner, a demand for $1.6 trillion in new taxes, was not meant as a serious offer. It was an ultimatum couched in an insult. Translation:

“We won the election. We have the whip hand. Not only are you going to sign on to higher tax rates and higher tax revenues, we are going to rub your Tea Party noses in your coming capitulation.”

That Boehner did not throw the offer back in Geithner`s face and tell him, “Give me a call, Tim, when you`re serious,” suggests that the speaker feels he is holding a losing hand.

He wants a deal where the GOP agrees to higher revenues and the White House agrees to cuts in future entitlement outlays. But the Obamaites are looking to dictate terms. They want a triumph. If that means casting Boehner as the Neville Chamberlain of the GOP, so be it.

What explains their hubris?

Two years ago, Obama had to eat crow and extend the Bush tax cuts. Now it`s payback time. And behind their arrogance lies a belief that the GOP cannot say no. For if the Bush tax cuts and the payroll tax cuts expire on Jan. 1, Americans will face the highest tax hike in history.

Every family earning up to $100,000 would see 2 percent of its income lopped off, as the employee half of the Social Security tax rises from 4.2 to 6.2. percent. The discretionary income of Middle Americans would be ravaged.

The federal tax rate on capital gains will rise from 15 percent to a maximum 24.7 percent, a jump of 60 percent.

The federal tax rate on interest and dividends will triple from 15 percent to a maximum 44.7 percent.

Where $5 million of an estate can now be passed on to one`s heirs non-taxed, that will be cut to $1 million. And the death tax rate would shoot from 35 percent to a neo-Marxist 55 percent.

Even Senate Democrats fear this would force a selloff or breakup of family farms and family businesses at death. Yet somewhere, the radical socialist Saul Alinsky, who inspired the young community organizer, is smiling.

Obama believes that if we go into the abyss, he can paint the Republican Party as having imperiled the economy and imposed tax increases on the middle class, just to spare America`s top 2 percent from a modest increase in its contribution to debt reduction.

And Obama has a hole card.

If those tax hikes hit Jan. 1, he will be able to posture as the rescuer of the 98 percent by proposing to the new Congress an Obama tax cut that restores the Bush rates for all couples earning less than $250,000.

He will also be able to dictate to Boehner & Co. the tax rate on estates, dividends and capital gains that he will accept or not accept. The Bush tax cuts would be replaced by the Obama tax cuts, as the GOP is cursed from coast to coast for taking us over the cliff.

Obama believes he will then be seen as pulling the nation out of the pit into which the GOP had plunged it, simply to spare its fat cats a needed haircut.

Clearly, many Republicans think that if they do not yield, Obama will let the country go over the cliff, blame them and portray himself credibly as the man who saved the nation from Republican intransigence over a small tax hike for the rich that most Americans support.

Yet Obama is not without risk here. As America heads toward the cliff, there could be panic selling of stocks, bonds and assets to avoid higher taxes on interest, dividends and capital gains in 2013. The economy could tank. Obama could become the Democrats` Herbert Hoover.

As for John Boehner, he must know that if he yields too much, his caucus will rebel and his speakership will be at an end.

What to do?

Forget the deal. Walk away from the talks with Geithner. Pass an extension of the payroll tax cut, and send it to Harry Reid. Pass the Bush tax cuts, and send them to Harry Reid and say:

“Harry, you are going to have to pass this extension of the tax cuts, or kill them, or send us a counteroffer. Do nothing, and you, not we, will take America over the cliff.”